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A fair bet is an uncertain prospect whose expected yield is zero. A person is risk averse if he never accepts a fair bet.

Risk Aversion | SpringerLink
link.springer : chapter

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The intrinsic value of a fair bet is one in which the cost of the bet is identical to the expected after-tax, net cash payoff. For example, if you had a lottery ticket that promised a 7% chance to win $100, a fair bet would be $7.00. If you could buy the bet for significantly less than $7.00, it is a good bet.

Calculating the Intrinsic Value of a Fair Bet - Joshua Kennon
joshuakennon : calculating-the-intrinsic-value-of-a-fair-bet

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